January 29, 2017
Nancy to power stakeholders: Help protect consumers vs Malampaya shutdown rate impact
As the scheduled 20-day maintenance shutdown of the Malampaya natural gas facility began over the weekend, Senator Nancy Binay again appealed to all power industry players to prioritize the interest of consumers.
"I applaud the efforts that our power industry stakeholders have laid out to cushion possible price shocks brought about by the shutdown. All we have to do now is be vigilant against a supply deficiency situation in the days to come," Senator Binay said.
"I ask all our partners in the energy industry to always think about the welfare of every Filipino consumer as we face the challenge of this maintenance shutdown," the lady senator said.
The maintenance work, which started last Saturday, January 28, is expected to last until February 16. During the period, the Malampaya gas field's underwater facilities will be fully repaired, with its platform and onshore plant receiving upgrades.
The Malampaya gas field provides natural gas to major power plants Ilijan (1,200MW), Sta. Rita (1,000MW), and San Lorenzo (500MW). These three plants cover almost half of the Luzon grid's power supply requirements.
Currently, among the measures that are being implemented by the Department of Energy (DOE) to manage the power supply deficiency is to have some of these plants run on alternative fuel. However, this is more expensive and will definitely bring about a hike in electricity rates.
Meralco said generation costs are expected to surge by P1.18 per kilowatt-hour (kWh). With tax and other charges, the rate increase is estimated to cost up to P1.44/kWh.
This power rate adjustment is expected to reflect in consumers' electricity bills in March 2017.
Senator Binay, the Senate Committee on Energy vice chair, continued to call on the Energy Regulatory Commission (ERC) to exhaust all means possible to temper the rate increase.
"Given that we still have no final determination of the actual power costs, I urge the ERC to extensively review all power supply agreements (PSAs) and secure all options that can offset or minimize the possible rate hike," she said.
Binay added that if there are any pending customer rebates, the ERC should allow these to be reflected in the March 2017 bills to further lessen consumer spending.
"We also should be open to the possibility of staggering the payment of electricity bills. If we can, let us have the bill collection spread out over a longer period of time so the public can pay lower increments every month." she added.
Aside from these contingency measures, Binay appealed to the ERC and DOE to finalize their review of lowering the secondary price cap offer of the Wholesale Electricity Spot Market (WESM).
It can be recalled that during Malampaya's last maintenance shutdown in November 2013, WESM prices surged forcing Meralco to announce a P4.15/kWh rate increase due to a huge deficiency in the supply.
This excessive hike prompted the ERC to lower the primary price cap from P62/kWh to P32/kWh in December 2013.
The power industry regulator also implemented a price-threshold mechanism of a P6.245/kWh secondary price cap that is activated once an average of P9/kWh is reached within a 168-hour period.
"I pray that our government agencies will be able to immediately issue their final decision on the secondary cap before any shortfall in the supply will be announced. This immediate decision can ultimately curtail any excessive spike in power rates in the WESM during the Malampaya maintenance shutdown," Binay said.
The legislator also encouraged the public to heed DOE's calls for efficient and effective use of electricity during the period.
"Let us all support DOE's campaign for energy efficiency. If we are able to lower the country's overall electricity demand, this can redound to a more stable power supply with minimal price shocks," the senator urged.
Tuesday, March 28
Monday, March 27
Sunday, March 26
Saturday, March 25